Electric vehicles like the Nissan Leaf and Honda Fit EV used to languish on dealership lots for months. A pricing war with aggressive incentives and cheap lease deals has changed all that.

Last year, Nissan sold about half the number of Leafs it had anticipated, marking two years in a row of disappointing sales for the electric car pioneer. One of the factors holding the Leaf back from appealing to the masses has been the upfront price premium drivers have had to pay for the cars, when compared with similar vehicles that run on plain old gas.

But in early 2013, Nissan tried to cut the knees out from this part of the anti-EV argument. The automaker dropped base prices on the Leaf by $6,400 for the new model, making the idea of buying an electric car for under $19,000 a reality, when state and federal incentives are factored in. And once lease deals, tax credits, and gas savings are considered in the equation, word has spread this spring that it’s basically possible to drive an EV for next to nothing.

Nissan’s EV competitors have followed with compelling deals of their own, including $199-per-month lease specials for the Chevy Spark EV and Fiat 500e. Mitsubishi and Toyota have also dropped prices dramatically for EV models. As CNET pointed out, the Honda Fit EV might be the best offer of all: a three-year lease for $259 per month, with no money down, unlimited miles, a 240-EV home charging station, and auto insurance included. Honda’s previous lease deal was $389 per month, a price point that failed to get consumers excited.

But within days of Honda dropping the special lease price by $130 in early June, dealerships in California were sold out and customers had to compete to get on the waiting list for more, per the Los Angeles Times:

“It’s incredible, especially since we haven’t had any foot traffic or interest in the car in six months,” said Jeff Fletcher, sales manager at Honda of Santa Monica. “I’m not even sure we’ll have enough cars for the people on the waiting list.”

Last week, Honda issued an apology for not having Fit EVs available, and promised more were on the way. “We recognize that some customers have experienced frustration as they attempt to locate dealers with available Fit EVs,” reads a statement from Steve Center, Honda’s environmental business development vice president. “We sincerely apologize for this – though it should be only a temporary inconvenience. The good news is that more Fit EV’s are on their way to dealer showrooms.”

Low-price deals have also given the Nissan Leaf a boost this year, tripling sales of the vehicle in the first five months of 2013, compared to the same period last year. Meanwhile, sales of the Chevy Volt—the gas plug-in hybrid that doubled the Leaf in sales in 2012—have been fairly flat thus far in 2013. Unsurprisingly, last week Chevrolet entered into the electric car price wars with a $5,000 cash back incentive.

Naturally, all of these deals will help automakers sell some cars. But are these aggressive incentives good for business? At this early stage of the EV marketplace, automakers appear be to focused on getting consumers to want these cars. Dropping prices in such dramatic fashion will certainly drive up interest. What’s unclear, however, is the extent to which the automakers truly want to sell large quantities of these vehicles at cut-rate prices. Earlier this year, Chrysler CEO said that his company, which owns Fiat, will lose roughly $10,000 for each Fiat 500e sold, according to the Associated Press.

While Honda says that more Fit EVs are on the way, the automaker doesn’t seem particularly interested in selling the vehicle by the tens of thousands—not yet anyway. For the time being, Honda is sticking with a plan to sell (or rather, lease, because they’re not selling the vehicles outright) a maximum of just 1,100 Fit EVs in the U.S. As the LA Times put it, “there is little financial incentive to increase production” on the Fit EV because Honda loses money on each of the cars it builds.

The goal, it seems, is to drive up interest in EVs with price breaks and limited supply—and then hope that interest remains high even when automakers raise prices down the line. Hopefully, these vehicles will soon see improvements in driving range in the near future — most can be driven only for about 75 to 80 miles before they need a recharge — which would make them more practical and help boost interest further.

While all of the lease deals and price slashing is obviously intended to woo potential new buyers, one Automotive News columnist writes that all of the recent wheeling and dealing may wind up inadvertently angering the early adopters who believed in the technology first and may now feel foolish for paying top dollar:

If I bought, say, a Nissan Leaf, it’s bad enough that my EV’s resale value is much lower than that of a hybrid. But if I paid full price for it in February, before it was discounted 18 percent, I’m feeling stupid. And I’m feeling that I have been played.

One of the things both Nissan and Mitsubitshi might try is to make their electric cars not quite so homely. Honestly, I look at the Leaf and expect it to leap on a lily pad, because it looks so much like a frog. Nissan has turned out some sharp looking cars so I don't understand why this one turned out to so badly need the kiss of the princess.

Here's the other dirty secret, we need EV's to fight climate change with. We need to fight climate change because it is a social, ecological and geopolitical threat. So it doesn't make a difference if EVs are loss leaders now. They serve more than one purpose, the prime one being cutting back on CO2. This holds true for conservation measures as well as alternative energy plans. The upcoming climate crisis is too severe to wait for technology to make a profit. Acknowledging this reality changes the equation drastically. It's why no politician wants to acknowledge this. It's why deniers have so much political traction. Because the reality - climate change is real, it's bad (real bad) and it will cost you money. mobility, political power, political friends and some of your cushy lifestyle to combat. An EV being unprofitable is the least of our problems. Look at it this way, when we were fighting the Nazis, we didn't wait to build a battleship unless we could show a proifit for every unit splashed out of dry dock. It's that serious.

I find it almost laughable that people talk about electric vehicles in the sense of "if", not "when". Electric vehicles will be the vehicle of choice, period. Even if we were to continue to use liquid fuel, at some point the propulsion will be electric. Burning fuel to create motion is inherently inefficient and the gasoline ICE is about as inefficient as they get. At the level of a power plant, more advanced techniques can at least get efficiencies 50% and up.

There are those who dream about a hydrogen economy, but does it makes sense to have 20-30% losses in the conversion of electricity to hydrogen followed by 50% losses or more in burning for motion? No. A fuel cell would make sense and we are back into electric vehicles, but odds are, you would want a 95% efficient battery pack for as much of the motion as possible as opposed to the 65-70% (electricity - hydrogen - electricity) process.

So really, we get down to electric being the only real option. Nothing else will touch its efficiency and because of that, nothing will touch its costs either in the long run. Perhaps we will have auxiliary fuel cells for long trips, but perhaps we will have battery swap stations instead?

SO it is a matter of when, not if, and when will be sooner the better we understand the technology and build economies of scale.

Another reason for the push on EVs by the automakers, and absent from this article, is government legislation. For example the California Air Resources Board (CARB) has regulations in place requiring the sales of Zero-Emission Vehicles (ZEVs). CARB mandated that starting in 2012, major automakers will have to produce a certain number of ZEVs. If an automaker can’t build enough to satisfy the regulation, it has to purchase credits from those that make more ZEVs than are required.

The Federal CAFE requirements for mileage requirements also help force the push of EVs. To get fleet mileage up, it really helps to have a vehicle that can be claimed to get 100 MPG but they still have to sell them. So lowering prices naturally makes them more appealing.

So in the end, if selling EVs means taking a loss in the short run, they appear to be willing to do so. If nothing else the automakers can stand before Congressional committees and show how they have earnestly endeavored to make a go of EVs and have the financial losses to prove it. I am sure the auto companies would rather see real demand increase so they can make money doing it, but if they have to take a loss on EVs to keep selling the profitable vehicles overall they will do it.

How, HOW?! can you seriously use that misleading headline with this story?! They cut production, it's not that they're having trouble keeping up with the public's demand for crappy subsidized fire hazards!

How about: "Danger and Disinterest Leads to Lower Supply of Dumb Sparky Cars; the 1,101st Enviro-Idiot Must Wait for Next Year's Model."

Or: "All of a Sudden, There Aren't Enough Pet Rocks Since the Fad Wore Off"

Or from 1943: "All of a Sudden, There Aren't Enough Jews to Keep Up With the Labor Force"

The problem for me with regards to EV is it won't be practical at all until I can recharge an EV with the same amount of energy in 5 minutes that I can get from filling up with gasoline. That's about 350 kilowatt-hours of power.

What happens when you run out of power? You going to slug a big heavy battery on your back, walk down the road, and wait for enough juice to get in the battery so you can walk back and charge the car?

Even a cheap beater can drive from Los Angeles to Seattle with minimal fuss. The expensive Tesla would leave you stranded, or, require at least several days to charge just to get you there.

The more of these that end up on the roads, the more people will see that they are perfectly functional. It's a good strategy to drop the price for now, and ramp up volume in the slightly longer term, then come out with the 2nd gen of these models.

as for "elec cars are just coal powered" - in NJ, less than 48% of energy production comes from coal + natural gas. nearly 13% comes from renewable sources, and close to 45% comes from nuclear. more and more homes are adding solar panels too. just drive around. coal is dead.

This is only great if it means a complete and utter overhaul of the power system in the United States which doesn't meet 21st century standards. If the government is willing to mandate and subsidize the overhaul of the power grid to something on par with what Germany has, then absolutely do this!

I think this is really good news. I personally believe these cars are the future. They're getting better and cheaper every year. You can see a time in the not too distance future when they will be subsidy free and extremely competitive with conventional internal combustion cars. I took a Tesla test drive yesterday, and man that car is cool. It's super fast, comfortable, and has lots of cool features. Plus that car is made in America. When was the last time we had an American product that was cutting edge, and manufactured here in America? This is a good thing for our economy, and for the environment. Good all around if you ask me.

No one that buys an EV feels stupid, even if the value of the new car goes down. Money is not the only reason people buy an EV, and the stupid person is the one that still drives a vehicle that sucks gas.

This is great, at least for the planet. I'm not sure if the EV car companies will be so happy, and the oil and gas industries won't be either. @JenniferBonin I think the second problem is already disappearing. I know in some places like Austin, TX a lot of gas stations have designated places to charge your EV. If Texas is starting to recognize there is a demand for it, then I'm sure others are quickly catching up.

My solar panels are producing 40% more than my needs, and the electric company is paying me for that excess, but only at wholesale prices. It would be wiser for me to USE that excess electricity, say on an electric vehicle, thereby burning less gas, saving money, and producing less pollution. With solar, I am longer concerned about electric rates.

Electric rates are regulated by public utility commissions. They have not gone up significantly in the last 30 years. Electricity at the average rate of $0.15/kwh is still around 1/6th to 1/10th the cost of $4/gallon gas in a 25 mpg vehicle. So even if electric rates did triple it wouldn't make much difference, EVs would still be substantially less to charge up than gas.

Electric cars are much more efficient at converting stored energy into motion. A 350 kilowatt hour battery pack would be good for 1000 miles, well beyond the range of your typical car. As pointed out, you can't fuel your car at home either. Behavior change is not a bad thing.

Well, you can't refuel your car at home as easily as plugging it in to the wall overnight. And haven't you heard of Tesla's Supercharger network? That's expanding every month. Internal combustion engine cars have a huge and costly support network that's been there for more than 70 years. Give electric cars some time and they'll catch up.

@EricPederson The fast chargers do present some distribution problems outside of business areas but the night charging is little issue to the power company. Remember that the existing gasoline refining and distribution is consuming massive amounts of energy. It takes as much power to put a gallon of fuel into a gas car as it takes to run an EV the same distance.

@EricPederson The power grid will evolve to handle this, if it has to. The reality is that EVs charge at night, when the grid is otherwise idle. We have a long way to go before this is even vaguely an issue.

@AlCzervik It is true that coal is a significant generator of electricity, but at night when most EVs are charged, the baseload generation is much cleaner. That said, electric vehicles are highly efficient at converting energy to motion, and a coal plant on average is far more efficient than a gas combustion engine.

@AlCzervik Al, I think if you look into this further you'll see that most power in the country is no longer coal powered. There has been a big change in he past five years and there is much more renewable power and natural gas both of which are much much cleaner than coal. For instance where I am in Los Angels, we have about 30-40ish percent coal depending on what's going on that day. We're about 50 percent carbon free, with 20-25 percent renewable, about 15 percent nuclear, and another 10-15 percent hydro. These figures change a little day to day, but the bottom line is in many places the cleanest car you can drive is electric.

@AlCzervik Yes, depending on where you live, a lot of the electricity is coal powered. But in some areas much is wind and hydro powered. Also as the electric grid improves, emissions and energy use of all these EVs will automatically be reduced as well. Whereas with a gas car, it's emissions stay the same throughout it's life.

You always have the choice of putting good solar panels on your house, giving back electricity during the day and charging your car off of your sun power.

I think they have a use as second cars or for people who travel short distances per day in predictable patterns. There's probably a reasonable market for that, but it's not going broad until battery technologies give drivers a couple hundred miles per charge. I don't think the car companies are going to subsidize this forever.

@bryanfred1 They won't have to "subsidize" it forever. Once the volumes go up, they won't be losing money on them. The cost of the batteries is the big issue. Once that is solved, it is the beginning of the end for ICE cars.

@EGG_FACE Wow, you are very resistant to change. But even you will change your mind, in no time. I got a Tesla Roadster as a loaner for the weekend. At the beginning my wife did not want to get in. But once she did, she never wanted to leave it. We returned the Tesla, but we now have 3 electric cars. Go drive one, and do your math, you will see that driving an electric car is cheaper than gas.

> "There isn't a single apartment complex where I live that allows this."

YET. Wait a few months or years and I think it will eventually become commonplace.

> "See the problem?"

For some apartment dwellers, yes, I'll grant you that. Though a lot of apartment garages already have power points available. And, even for those that don't, it's not an insurmountable problem, is it?

>"When a battery pack can be recharged completely in less than 5 minutes to give me that range then MAYBE an EV will be a viable choice."

Boy, you set a high standard – a lot of people are pretty happy with the charging overnight thing. But anyway according to Tesla chief Elon Musk, it will be possible to charge an EV battery in less time than it takes to refuel an ICE car.

Most people have a power point in their garages. You sleep, it recharges - simple. Save 5 minutes refuelling time, you save having to visit the station in the first place, and you save X amount of $$ for a full tank. Go on, tell me that isn't appealing!

Also… no oil changes, no tuning, fewer moving parts (1 moving part in an electric motor vs scores of them in an internal combustion engine) meaning fewer mechancial problems, less servicing, and ultimately fewer breakdowns.

@JerryPeavy@EricSievering@AlCzervik We also have Diablo Canyon. San Onofre has been shut down for more than a year. California power is very clean. We are 50% renewable and no coal here in Marin County. The place is teaming with Leafs and Teslas.

@fred1@EGG_FACE The same people complaining about EV pollution would be more than happy to throw their cell phone, electric toothbrush or smoke detector in the trash. Solar cell fab can be very messy and we don't really know what has been released in Asia where they are made.

Plus you can reuse almost 100% of a tired lithium-ion battery and make another lithium-ion battery out of it, i.e. nothing is depleted in one when the battery starts to run out of juice. So nothing will end up as landfill and all the environmentalists out there, like yourself, can breathe a sigh of relief.

@EGG_FACE Toxic legacy of solar panels? Considering most solar panels are plastic, glass, silicon sandwiches, their toxic legacy is minimal. For cadmium telluride, there is an end of life program in place to handle the waste stream. Toxic legacy of wind farms? Now you are really reaching.

Electric vehicles are highly efficiency at converting energy to motion unlike gas engines which are generally running way off their efficiency peak. Not to mention electrics are generally charged at night when we run mainly off fairly green base generation.

The study highlights in particular the "toxicity" of the electric car's manufacturing process compared to conventional petrol/diesel cars. It concludes that the "global warming potential" of the process used to make electric cars is twice that of conventional cars.

The study also says - as has been noted many times before - that electric cars do not make sense if the electricity they consume is produced predominately by coal-fired power stations.

Let's also not forget the toxic legacy of solar panels, wind farms, and damming and destroying habitats to produce "clean" electricity. The Columbia River Gorge, for example, is permanently ruined just so some elitists in Los Angeles can pretend they are doing something beneficial for the environment.

@EGG_FACE Please provide evidence of "double that of conventional vehicles" in manufacturing. The EV does not simply "shift pollution somewhere else". It reduces emissions overall, because it is more efficient. Toxic effects on air and ground water are far more difficult to control when you have millions of vehicles everywhere spewing and dripping chemicals on every street corner. And I don't know why you feel the need to bring my sleeping habits into the conversation -- it adds nothing. Perhaps the best way to reduce emission is to simply drive less. I can say that I do that. I have a six mile commute. I don't know that it makes me sleep better or not.

Let's not forget the massive amounts of pollution created during the EV manufacturing process - double that of conventional vehicles.

As long as a car is being used to carry one person around whether that car is EV or gasoline won't make a bit of difference in overall pollution since the EV car just shifts the pollution somewhere else and someone else has to live with the toxic effects on their air and ground water just so people like you can sleep a bit better at night.